Car insurance prices have been falling for a full 12 months, the first time such a consistent decrease has been seen in three years, new research has revealed. The average cost of a motor insurance policy currently stands at £768, having fallen by £13 (2 per cent) since the end of 2017"s first quarter. Prices fell particularly sharply in the first quarter of 2018, with premiums dropping by £59, or seven per cent.
The youngest drivers have benefited most from the decreasing cost of insurance, with 17-year olds now paying £118 less for cover than they did last year, and £201 (nine per cent) less than they would have paid three months ago. Insurance remains expensive for younger motorists, though, with 18-year olds paying an average of £2,114 per year.
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Some drivers have seen insurance increase compared to 12 months ago, though. Insurance for motorists in the Scottish Borders rose by £32 (six per cent), while those in central and north Wales saw cover go up by £10, with an average policy now standing at £629.
The overall reduction in the cost of car insurance is said to be partly due to a forthcoming Government review of the discount rate, used to calculate insurance compensation payouts. A crackdown on fraudulent whiplash claims is also believed to be a factor in the fall.
Louise O"Shea, chief executive at price comparison site Confused.com, which noted the recent fall after analysing its quote index, said: “Finally drivers have had some good news with the end of rising car insurance costs in sight.”
Insurance still remains comparatively expensive, though: Confused.com says drivers are paying an average of £97 more than they were two years ago, and £261 more than they were a decade ago.UK car insurance market is "dysfunctional" says top insurer
The chief executive of Aviva insurance, Mark Wilson, previoulsy spoke about serious problems in the car insurance market as a whole. Insurers tempting new customers with low offers at the expense of loyal customers is commonplace, which is why he believes the market is "dysfunctional".
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Wilson criticised the industry by saying new customers are tempted by offers that are "too low" which in turn means existing customers have to pay more for their premiums to make up for the loss.
Speaking to BBC"s Today Programme, Wilson said: "I think that the UK car insurance market is dysfunctional, I don"t think it works properly. The entry level is too low and then it gets put up for all existing customers."
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